Blockstream Aqua: Selling Liquid Bitcoin(L-BTC)

[arbiter5]

So I just found out that Blockstream is selling their wallet users Liquid Bitcoin (L-BTC). I totally get that BTC is pegged 1:1 to L-BTC, but this appears to be not so 'bitcoinish' to me. It seems to be no different than selling noobs Wrapped Bitcoin (WBTC) in my opinion.

My opinion towards Blockstream used to be fairly average. But after seeing this, I'm having second thoughts. See screenshot below:



The wallet by Blockstream in question: https://blockstream.com/aqua/

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[arbiter5]

L-BTC has been around for few years, but it's a bit different from WBTC since L-BTC network is built-on top of Bitcoin network while WBTC built-on top of Ethereum network.
Still, it's not popular because only few people use it and few wallet support it, even though Liquid network offer better privacy.

Doesn't change the fact that both L-BTC and WBTC are both bitcoin IOUs.

[TryNinja]

I don't think there is nothing wrong per se in selling L-BTC through their app. The main issue with Bitcoin.com is that they intentionally try (or at least tried) to mislead newbies in thinking Bitcoin Cash (BCH) is Bitcoin.

It seems like they changed a few things for the better, but when people overly criticised Bitcoin.com, they not only had Bitcoin Cash as the first thing you would see and select when buying coins (or using the wallet), but they also had it named Bitcoin (BCH) and Bitcoin Core (BTC), which is totally misleading.

That doesn't seem to be the case with Blockstream's Aqua and L2 solutions are needed, so what's wrong with it?

[suchmoon]

That doesn't seem to be the case with Blockstream's Aqua and L2 solutions are needed, so what's wrong with it?

Do they adequately explain what L-BTC is and how to get the "real" BTC out of it? I'm not sure what's the point of selling L-BTC directly other than to mislead users into buying something they don't need. They could sell BTC and allow to "peg in" if someone wants to.

[TryNinja]

Do they adequately explain what L-BTC is and how to get the "real" BTC out of it? I'm not sure what's the point of selling L-BTC directly other than to mislead users into buying something they don't need. They could sell BTC and allow to "peg in" if someone wants to.

Hmm... I had to download their wallet, but I don't think they explain as much as they could/should.

You can download the app, go to the "Exchange" tab (the one on the OP), tap Buy L-BTC and just put your credit card details. I do agree they should have an screen explaining that L-BTC is not the actual on-chain BTC and that they may not be able to spend them to unsupported third-parties.

They do have an "Liquid 101" FAQ on the "Profile" page (last icon on the navbar), but iI don't think it's really intended for beginners.

[squatter]

Do they adequately explain what L-BTC is and how to get the "real" BTC out of it?

This is what users see in the Aqua app when they navigate to the L-BTC wallet:



I suppose that at least conveys that L-BTC is not the same as real bitcoin.

I'm not sure what's the point of selling L-BTC directly other than to mislead users into buying something they don't need. They could sell BTC and allow to "peg in" if someone wants to.

One reason to buy L-BTC instead: You can transfer it faster and more cheaply, assuming you're sending to compatible services. If someone is just buying coins to send to an exchange, then BTC might be slow and costly by comparison.

But yes, I think they are obviously intent on driving Liquid adoption with this UI.

Side by side, two different assets with two different ticker symbols -- it doesn't occur to me as deceptive. It's nothing like what Bitcoin.com was doing.

[suchmoon]

I'm not sure what's the point of selling L-BTC directly other than to mislead users into buying something they don't need. They could sell BTC and allow to "peg in" if someone wants to.

One reason to buy L-BTC instead: You can transfer it faster and more cheaply, assuming you're sending to compatible services. If someone is just buying coins to send to an exchange, then BTC might be slow and costly by comparison.

Considering that compatible services are nearly non-existent it looks like a trap. Perhaps if it was easily convertible both ways inside the app itself it would be ok I guess. Is it?

IIRC peg-out was possible only via exchanges, mostly centralized/KYC ones. If the app helps to overcome this - great, but I kinda doubt it.

BTW that disclaimer seems inadequate for what is essentially a custodial service.

[pooya87]

That's the problem with a centralized company building a wallet. They will want to benefit from their product, selling you their centralized token benefits them, even though it is nothing like the usual tokens such as the WBTC one that was mentioned.
Keep in mind that you also have zero privacy by default in such wallets.

[mk4]

I'm not sure what's the point of selling L-BTC directly other than to mislead users into buying something they don't need. They could sell BTC and allow to "peg in" if someone wants to.

In a UX perspective, this is definitely the way to do it. Is it really hard to implement it in a way that the app would only convert the BTC to L-BTC, and just re-converts back to BTC once it arrives to the receiver(exchange)? That way, in the user's perspective, it feels like he/she simply just transferred BTC. No need of selling a separate asset and all that jazz. Or am I missing something here in the technical side of things?

[Karartma1]

Shall we get into politics every time? L-BTC is a form of bitcoin IOU, yes. Like WBTC and RBTC and whatever else. These tokenized bitcoins, have a few use cases now. As they don't affect the real deal badly, I wouldn't bother if a company or a protocol leverage these tools to allow users to get more from corn. my 2 sats

[arbiter5]

Shall we get into politics every time? L-BTC is a form of bitcoin IOU, yes. Like WBTC and RBTC and whatever else. These tokenized bitcoins, have a few use cases now. As they don't affect the real deal badly, I wouldn't bother if a company or a protocol leverage these tools to allow users to get more from corn. my 2 sats

You're missing the point. People could use whatever synthetic BTC or whatever cryptocurrency they want. Hell do I care. It's just that some of these Blockstream people likes hating on wrapped BTC, and here they are selling something similar.

[amishmanish]

These tokenized bitcoins, have a few use cases now.

If someone wants to use their Bitcoin wealth in risky but creative ways, they don't have many options except using either these wrapped tokens or by simply converting it to stablecoins and providing deposits to borrower-lender platforms. WBTC and RBTC will let you do that because they are on Ethereum where most of these other platforms are.

L-BTC is essentially blockstream's answer to the BTC rich OGs. The fact that it supports CTs is thus, important. Other important thing which makes it viable for OGs is that it has a set of partners which mainly includes exchanges. So I suppose, if you are a bitcoin OG, L-BTC is the solution if you want to play with all that money. Isn't that a use case? Its the only use-case that money has ever had.

[dkbit98]

I never heard them calling L-BTC the real Bitcoin and if all other blockchains can create their own versions on ethereum, tron, polkadot and who knows where else, why it is so bad to create something like L-BTC on Bitcoin Sidechain and second layer solution.
It's meant for traders and exchanges not so much for general public.

[Pmalek]

Their website states that the Aqua app allows users to buy bitcoin and liquid bitcoin. They clearly make distinctions between the two and aren't trying to trick the users into buying something that isn't bitcoin.

- If you want bitcoin, you click on the buy bitcoin button.
- If you want liquid bitcoin, click on the buy liquid bitcoin button.

The real bitcoin is represented in orange, the liquid asset is in green. That's the case on the picture OP shared, and on the image they posted of their app.


But there is another issue. If you navigate to their help center, you can read their instructions on how to buy bitcoin. It's all mentioned there step by step. But pay attention to the images they posted. The guide is supposed to show how to buy bitcoin, but on the pictures they have selected LBTC, not BTC! This can cause confusion for newbies. Whether or not they did this intentionally, is not on me to speculate. 

[suchmoon]

L-BTC is essentially blockstream's answer to the BTC rich OGs. The fact that it supports CTs is thus, important. Other important thing which makes it viable for OGs is that it has a set of partners which mainly includes exchanges. So I suppose, if you are a bitcoin OG, L-BTC is the solution if you want to play with all that money. Isn't that a use case? Its the only use-case that money has ever had.

If you're a rich OG would you really care to save a few bucks on the TX fee while transferring some coins to dump? You would probably care more to be able to use an exchange that you want instead of the few sketchy ones that they offer.

This seems to be targeted at noobs who don't know better. Sell them some dust, lock them in, and claim that this L-BTC thing is used by X million users.

[squatter]

One reason to buy L-BTC instead: You can transfer it faster and more cheaply, assuming you're sending to compatible services. If someone is just buying coins to send to an exchange, then BTC might be slow and costly by comparison.

Considering that compatible services are nearly non-existent it looks like a trap. Perhaps if it was easily convertible both ways inside the app itself it would be ok I guess. Is it?

IIRC peg-out was possible only via exchanges, mostly centralized/KYC ones. If the app helps to overcome this - great, but I kinda doubt it.

BTW that disclaimer seems inadequate for what is essentially a custodial service.

Fair points, but it's worth pointing out that Liquid's security guarantees are significantly stronger than a traditional custodial service.

One of the problems I see is that Liquid is not really bootstrapped yet. The final goal is an actual peer-to-peer network built on top of Bitcoin that people use, P2P. Today, there is a lack of network liquidity -- there is little you can do with L-BTC -- so there is a focus on the need to peg out. In the future as network effect grows -- reinforcing the ability to convert to other currencies via P2P markets or secondary services who interface with federation signers -- this will in theory become less and less important.